Indian shares eye positive start after sharp drop, but elevated oil, yields weigh
- GIFT Nifty futures were at 23,116 points
Indian shares are set to open higher after a significant drop, but elevated crude prices and global bond yields continue to pose challenges for the market.
- Previous session's steepest drop in 10 weeks.
- Impact of elevated crude prices on India.
- Global geopolitical factors affecting oil and bond yields.
Indian shares are expected to open higher on Friday, after recording their steepest drop in 10 weeks in the previous session, although elevated crude prices and global bond yields will continue to test the market.
GIFT Nifty futures were at 23,116 points, as of 7:40 a.m. IST, indicating a positive start for the benchmark Nifty 50 index, which closed at 23,063.1 on Thursday.
The Nifty 50 and BSE Sensex logged their biggest daily percentage drop in 10 weeks on Thursday as surging oil prices stoked inflation concerns, while heavyweight financials slid on proposed insurance commission caps that investors expect will hit their earnings.
The Nifty 50 and Sensex are down 1.2% and 1% so far this week, setting the stage for a seventh straight weekly drop as concerns persist over the impact of war in the Middle East on inflation and interest rates globally.
Oil prices fell slightly on Friday, but remained at the elevated level of $106 per barrel, as markets weighed the possibility of a truce between the US and Iran against the bombing of Saudi Arabia by Houthi rebels . Elevated oil prices sent US 30-year bond yields to their highest in more than 20 years.
As the world’s third-largest importer of crude, higher oil prices are a key vulnerability for India, adding to the import bill, intensifying inflation fears and dragging corporate profitability.
US and Iranian negotiators in New York are exploring a phased path out of war that would involve Tehran reopening the Strait of Hormuz and Washington lifting its economic blockade of Iran, Reuters reported, citing sources.
Meanwhile, foreign investors sold Indian shares worth 50.27 billion rupees ($523.89 million) on Thursday, as per provisional data.